NZD Struggles to Bounce After Opening Lower on Coronavirus Panic

The New Zealand dollar opened sharply lower today as markets were in a panic mode as the coronavirus was spreading from China to other parts of the world. While the currency is trying to trim its losses, it is still trading far below Friday’s close. Mixed domestic macroeconomic data was not helping the kiwi.
Investors were panicking after the reports that the deadly virus, which originated in the Chinese province of Wuhan, is spreading beyond China. While the vast majority of new cases continued to be reported in Asia, other parts of the world were hit as well, with Iran and Italy reporting several deaths from the disease known as COVID-19. Beyond the terrible toll on human lives, the outbreak is expected to hurt the global economy hard.
As for economic releases in New Zealand, they were mixed. According to a report from the Reserve Bank of New Zealand, credit card spending increased by 3.7% in January, year-on-year, accelerating from December’s 3.5%. Month-on-month, the spending increased by 1.3% after falling by 0.9% in December. Meanwhile, Statistics New Zealand reported that the total volume of retail sales rose 0.7% in the December quarter from the previous three months on a seasonally adjusted basis, with higher sales numbers registered in 13 of the 16 regions. While it was not a bad result by itself, the actual reading was slightly below the consensus forecast of a 0.8% increase and significantly below the previous quarter’s gain of 1.7%.
NZD/USD was at 0.6325 as of 12:48 GMT today after closing at 0.6351 on Friday and opening at 0.6314 on Monday. EUR/NZD fell from 1.7130 to 1.7105 today after closing at 1.7067 on the previous trading session. NZD/JPY closed at 70.92 on Friday, opened at 70.31 today, rose to the daily high of 70.66 but retreated to 70.42 later.

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